June 3 – Stock Mentions: CY, SMH, AAPL, BA, FB, GOOGL
Michael Kramer and the clients of Mott Capital own AAPL, GOOGL
US Markets
- S&P 500 Futures – 10.75 points
- US 10-Year Treasury – 2.1%
- Dollar Index – 97.65
- Oil – 53.88
- VIX – 18.90
International Markets
- Shanghai Composite – -0.30%
- Hong Kong HSI – -0.03%
- South Korea KOSPI -+1.28%
- German DAX – -0.20%
- UK FTSE – -0.38%
- German 10-Year Bund – -0.19%
International Trading – June 3
Over the night, the China Caixin Manufacturing Purchasing Managers Index (PMI) came with a reading of 50.2 versus estimates of 50.2. Additionally, the German PMI came in at vs. estimates of 44.3
South Korea KOSPI
The South Korea KOSPI continues to make positive strides rising above a key level of technical resistance at 2,050 on June 3, and could be setting up for a further move higher toward 2,100. We will continue to watch this index because it was one of the first of international markets that topped out on April 17. So we will continue to pay attention.
Shanghai
The Shanghai Composite continues to flirt with a breakout, but to this point, it has been able too.
Dollar
The dollar index is nearing a massive reversal on June 3, and that will help to boost commodity prices and especially oil. I talked about this break down in a video on Friday, and why it will happen. Tariffs Are Not The Most Important Thing Happening In The Market
German Yields
German Bunds continue to trade at record low levels at -20bps. This morning the German Manu. PMI came in as expected at 44.3. The good news is that PMI has shown signs of stabilization. However, it needs to start rising, and soon, the message the survey is sending is of recession in Germany, which is why the bund yield continues to fall. That will help to drag our yields even lower.
US Trading
We will get our PMI reading today, June 3 at 10 am, with the ISM, forecast are for 52.9.
S&P 500 (SPY)
The S&P 500 is pointing to a lower opening on June 3, and the SPY is nearing a pretty significant level of support at $273.25. So we will look for the SPY to hold support there this morning. If that level doesn’t hold look for a drop to $267.25. However, I do think we will hold support at $273.25.
As I noted over the weekend, the S&P 500 could fall to around 2,735 and remain in the falling wedge. The pattern is a bullish reversal one, and I think that signals that the sell-off is due for a short-term rebound at the very least perhaps back to 2,800 to start.
Russell (IWM)
We can see that the same pattern has formed in the Russell IWM ETF.
Cypress and Semiconductor Stocks (CY, SMH)
Semiconductor stocks should get a boost today after it was announced that Infineon would acquire cypress Semi for $23.85 per share. This is yet another sign that perhaps valuations for semis are too low, and if more deals start happening watch for semis to pop. (See: Chip Data Suggests A Bottom Is Near)
Boeing (BA)
Boeing is breaking down and is now on pace to drop to around $320 and perhaps lower.
Apple (AAPL)
Apple continues to suggests a turn around is on the way with support around $175 and the potential for AAPL to rebound to $182.
Facebook (FB)
Facebook is falling towards support for the stock at $173 and could drop to as low as $169.
Alphabet (GOOGL)
Alphabet is declining towards support around $1,065. I am not sure how to process this news yet of the DOJ investigation. That said support must hold for googl.
Have a good day.
-Mike
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